Buying a rental property through a limited company changes how the mortgage works at every stage. The loan is secured on a property the company owns, the lender underwrites the company and its directors rather than you alone, and the product range, the documentation and the timeline all look different from a personal buy-to-let. This guide sets out the options open to a company landlord: how Special Purpose Vehicle (SPV) lending works, what lenders need to say yes, whether to use one company or several, how refinancing behaves inside a company, and how the tax treatment (full interest relief inside the company against the Section 24 restriction on individuals) shapes which route is right.
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How a limited company buy-to-let mortgage actually works
A limited company buy-to-let mortgage is secured against a property owned by the company, not by you. That single fact drives most of the practical differences. The borrower on the loan is the company; the lender assesses the company's position, then looks through to the directors as the people who control and stand behind it. Because the corporate borrower has no employment income or personal credit file of its own, lenders lean heavily on the directors, almost always backing the loan with personal guarantees.
A personal guarantee makes a director individually liable for the debt if the company defaults. It is worth being clear-eyed about this: the limited liability that protects you elsewhere in the company does not shield you from the mortgage you have personally guaranteed. Most lenders take guarantees from every director and from any shareholder holding a significant stake, commonly 20% or more.
Lenders also treat company buy-to-let as commercial rather than regulated residential lending in most cases. That affects the consumer protections that apply, the way the loan is documented, and the part of the lender's business that processes it, which is one reason company applications generally take longer to complete than personal ones.
SPV versus trading company: why the wrapper matters to lenders
Buy-to-let lenders strongly prefer a Special Purpose Vehicle: a company that does nothing but hold and let property. They identify an SPV by its registered SIC codes, the standard property-investment codes being 68100 (buying and selling own real estate), 68201 and 68209 (renting and operating own or leased real estate), and 68320 (management of real estate on a fee basis). A company whose Companies House record shows a trading activity alongside property (a consultancy, a shop, a building firm) is read as a trading company. Trading-company landlords face a much smaller lender pool, because the lender does not want the property security entangled with the risks of an operating business.
The practical consequence is simple. If you already run a trading company and want to buy property, you almost always set up a fresh, clean SPV rather than buying through the existing entity. The SPV property structure that lenders reward is one that is unambiguous on paper: property SIC codes only, directors and shareholders clearly set out, no trading clutter. If you are weighing the decision to incorporate from scratch, our complete guide to buy-to-let limited companies covers the structural choices in full.
Eligibility and the documents lenders expect
Company applications need more evidence than personal ones, and the most common cause of delay is incomplete paperwork. Assembling everything before you apply is the single most useful thing you can do to keep the process moving.
On the lending criteria, expect most lenders to look for:
- A deposit of around 25% (a maximum loan-to-value near 75% is common for standard cases), with larger deposits often needed for new companies or larger loans.
- The company set up as an SPV with property-investment SIC codes only.
- Directors with a track record as landlords, either personally or through another company, though several lenders accommodate first-time company landlords who hold property in their own name.
- Rental income that comfortably clears the lender's interest cover requirement when stress-tested at a notional rate above the actual pay rate.
- A UK-registered company with a clean, simple ownership structure.
On the company side, lenders typically ask for the certificate of incorporation, the memorandum and articles of association, the company's SIC codes and shareholding structure, any accounts where the company has been trading, and company bank statements. On the personal side, each director provides identity and address evidence, personal income evidence, details of any existing buy-to-let portfolio, and consents to credit checks. The directors' personal credit profiles matter as much as the company's because the guarantees rest on them.
Personal buy-to-let versus company buy-to-let: a side-by-side view
The two routes share the same goal but behave differently across lending, tax and administration. The table below sets out the structural contrasts that matter most when you are choosing between them. It deliberately leaves rates and fees out, because those move constantly and depend on your specific case; a broker is the right source for live pricing.
| Feature | Personal buy-to-let | Limited company (SPV) buy-to-let |
|---|---|---|
| Who borrows | You, as an individual | The company, with director personal guarantees |
| Mortgage interest treatment | Restricted under Section 24 to a basic-rate tax credit | Deducted in full from rental profit before tax |
| Tax on rental profit | Income tax at your marginal rate (with the Section 24 credit) | Corporation tax on company profits |
| Lender pool | Wide, including most high-street lenders | Narrower, mostly specialist and intermediary-only lenders |
| Documentation and timeline | Lighter; faster to complete | Heavier; commercial process, longer to complete |
| Extracting the profit | Rent is already yours after tax | A second tax layer applies on dividends drawn out |
| Ongoing admin | Self Assessment (and Making Tax Digital where in scope) | Annual accounts, confirmation statement and CT600 |
The tax interaction: Section 24 and why companies look attractive
The mortgage and the tax position are inseparable for a leveraged landlord, and the tax point is what tipped this market toward companies in the first place. Section 24 is fully in force for individuals: instead of deducting mortgage interest from rental profit, an individual landlord adds back the finance cost and receives a basic-rate tax credit (20% for 2026/27). For a basic-rate taxpayer the credit roughly matches the relief they would have had. For a higher or additional-rate taxpayer it does not, and that gap is the wedge that makes geared portfolios painful to hold personally.
A limited company is outside Section 24 altogether. It deducts mortgage interest, arrangement and broker costs in full as finance costs before arriving at the profit on which corporation tax is charged. For a heavily geared higher-rate landlord that full deduction can be decisive. Our Section 24 guide sets out the credit mechanics in detail.
One forward-looking point that is frequently stated wrongly elsewhere. Finance Act 2026, which received Royal Assent on 18 March 2026, introduced separate property income tax rates from 6 April 2027 of 22% basic, 42% higher and 47% additional, applying to property income in England, Wales and Northern Ireland (only Scotland is carved out). The same Act lifts the Section 24 finance-cost reducer in step, from 20% to the new 22% basic property rate. Because the reducer tracks the basic rate, a basic-rate landlord sees no new wedge open in 2027/28, and a higher-rate landlord's relief edges up from 20% to 22% while still sitting far below their 42% rate. The change does not widen the existing finance-cost gap, but it does keep the direction of travel pointing toward company ownership for geared higher-rate landlords. We work through the comparison in our guide to incorporation timing.
A worked Section 24 comparison
Take a higher-rate landlord with £30,000 of annual rent and £18,000 of mortgage interest, ignoring other costs for clarity.
Held personally. Section 24 disallows the £18,000 interest as a deduction. The landlord is taxed on the full £30,000 at 40%, a £12,000 charge, then receives a 20% credit on the £18,000 interest worth £3,600. Net income tax is £8,400, leaving £3,600 after the actual interest is paid (£30,000 rent − £18,000 interest − £8,400 tax).
Held in a company. The company deducts the £18,000 interest in full, leaving £12,000 of profit. Corporation tax at the 19% small-profits rate (profits up to £50,000) is £2,280, leaving £9,720 retained in the company. If the landlord then draws all of that out as a dividend, a second layer of dividend tax applies in their hands; if they retain it to fund the next deposit, only the corporation tax has been paid. The company route keeps far more of the cash working as long as the profit stays invested, which is exactly the position of a landlord still building a portfolio. The picture flips for someone who needs to spend every pound of rent immediately, because the second tax layer then bites in full.
The figures are illustrative and the corporation tax rate rises through a marginal-relief band between £50,000 and £250,000 of profit before reaching the 25% main rate; our corporation tax marginal relief guide explains that band.
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One SPV or several? Structuring a growing portfolio
Once you are buying more than one property, the question of multiple SPVs or one company comes up quickly, and lenders care about the answer. There is no single right structure, only trade-offs.
A single SPV holding everything is the cheapest and simplest to run: one set of accounts, one confirmation statement, one corporation tax return. The drawback is concentration. Every property sits behind the same company, so a problem with one (a lender dispute, a difficult tenant, a charge) sits in the same entity as the rest, and selling one property in isolation can be less clean.
Splitting the portfolio across multiple SPVs ring-fences risk, lets you spread borrowing across more lenders (useful when an individual lender caps how much it will lend to one borrower or group), and makes it possible to sell an entire company, and the property inside it, as a share sale rather than a property sale. The cost is real: each company is a separate filing burden and a separate annual running cost. Some lenders also aggregate exposure across companies they can see are connected, so multiple SPVs do not always unlock the extra lender headroom people expect. Cross-guarantees between companies can support larger purchases but add legal complexity. Decide on the basis of how large the portfolio will get, your exit plan, and your tolerance for administration rather than a rule of thumb.
Refinancing and remortgaging inside a company
Refinancing is where company ownership shows a genuine, often under-appreciated advantage. Remortgaging a property the company already owns is not a disposal, so it does not trigger Capital Gains Tax or a fresh Stamp Duty charge. You can remortgage to release equity, deploy that equity as the deposit on the next purchase, and the interest on the larger loan stays fully deductible against the company's rental profit. That makes buy-to-let refinancing inside a company a clean way to recycle capital as values rise.
Two things to keep on the radar. First, early repayment charges on the deal you are leaving can outweigh the benefit of moving, so time remortgages to deal expiry where you can. Second, watch what happens to cash you pull out. If the company simply lends released equity to a director rather than reinvesting it, you create or change a director's loan account balance, which has its own tax consequences (an overdrawn director's loan left unpaid nine months after the year-end attracts a section 455 charge of 35.75% for loans made on or after 6 April 2026). Repaying a credit balance you genuinely lent the company is tax-free; drawing beyond that is not. Our guide to buy-to-let refinancing works through when it makes financial sense.
Moving existing property into a company: the mortgage angle
Many landlords first meet company mortgages when they decide to move personally held property into a company. The mortgage cannot transfer with the property, because the company is a different legal person. In practice the personal mortgage is redeemed and the company takes out a new buy-to-let mortgage on the same property, which means early repayment charges if the personal deal is still fixed, plus a fresh company application.
The tax cost is the larger issue and is the reason this should never be a snap decision. Transferring property to a limited company is a disposal at market value, so Capital Gains Tax can arise on the gain over your original cost, charged at the residential rates of 18% (basic-rate band) and 24% (higher-rate band), with only the £3,000 annual exempt amount to set against it. Incorporation relief under TCGA 1992 s.162 can defer that gain where the lettings genuinely amount to a business, but since Finance Act 2026 it must be actively claimed for transfers on or after 6 April 2026 rather than applying automatically, and HMRC tests whether the activity is a business in the first place. The company also pays Stamp Duty Land Tax on the value it acquires, including the 5% additional-dwellings surcharge, and in some structures the higher 17% flat charge can apply. Our guide to SDLT on incorporation explains why landlords describe this as paying stamp duty twice, and our wider Capital Gains Tax guide covers the disposal mechanics. Model the full transfer cost (CGT, SDLT, early repayment charges and new arrangement costs) against the future tax saving before you commit.
Getting the cash back out: profit extraction
A company holds rental profit efficiently, but the cash is the company's, not yours, until you extract it. That is the trade landlords accept in return for full interest relief and lower tax on retained profit. The main routes out are a modest salary, dividends above the dividend allowance, and tax-free repayment of a director's loan where you lent money into the company (for example to fund a deposit). Dividends carry a second layer of tax in your hands, which is the double-taxation effect people worry about, but it only bites on profit you actually draw. Retain the profit to buy the next property and only corporation tax has been paid. The right balance depends on your other income and your plans; our salary versus dividends guide sets out the options.
Is a company mortgage the right route for you?
Company ownership tends to suit higher and additional-rate taxpayers with geared portfolios, landlords planning to keep expanding, and those happy to retain profit in the business to compound it. The full interest deduction and lower tax on retained profit usually outweigh the heavier admin and the second tax layer on extraction for that group.
It suits others far less well. A basic-rate taxpayer with one or two lightly geared properties who wants to spend the rent now often finds personal ownership simpler and cheaper, with a wider mortgage market and no company filing to manage. The decision is never the mortgage alone; it is the mortgage, the tax treatment, your other income, and what you intend to do with the cash, weighed together. Treat the company as a tool that fits some plans and not others, not as an automatic upgrade.
Where specialist advice earns its place
Company mortgages sit at the junction of lending criteria, company law and tax, and a structure that looks neat on a spreadsheet can create awkward consequences in practice: a SIC code that shuts off lenders, an ownership split that triggers guarantees you did not expect, or an incorporation that crystallises a CGT bill the relief could have deferred had it been claimed in time. Getting the structure right at the outset is far cheaper than reorganising later. If you are weighing whether to buy through a company, or how to structure a portfolio you are building, our incorporation service and wider specialist team can model your specific position before you commit, and our calculators give a useful first indication.